Total spending on medicines is forecast to reach $1.5 trillion by 2021, up 33% from 2016 levels, even as annual growth moderates from the record pace set in 2014 and 2015, according to new research released by the QuintilesIMS Institute. While historically large numbers of high-quality new medicines will emerge from the R&D pipeline in the next five years, pricing and market access pressures, lower volume growth in pharmerging markets and greater savings from patent expiries will contribute to the lower rate of growth.
The report, Outlook for Global Medicines Through 2021: Balancing Cost and Value, found that medicine spending will grow at a 4-7% compound annual rate during the next five years, down from the nearly 9% growth level seen in 2014 and 2015. The total global spend for pharmaceuticals through 2021 will increase by $367 billion on a constant-dollar basis. Spending is measured at the ex-manufacturer level before adjusting for rebates, discounts, taxes and other adjustments that affect net sales received by manufacturers. The impact of these factors is estimated to reduce growth by $127 billion, or approximately 35 percent of the growth forecast through 2021.
“The outlook for medicine spending growth reflects a more sustainable level for health systems, following the unexpectedly high growth seen in recent years,” said Murray Aitken, senior vice president and executive director of the QuintilesIMS Institute. “At the same time, the astonishing level of scientific advances for disease treatments inevitably will place ongoing pressure on funding for medicines—requiring value-based assessments that balance patient needs and pricing levels with competing healthcare priorities.”
In its latest study, the QuintilesIMS Institute highlights the following findings:
The full version of the report, including a detailed description of the methodology, is available at www.quintilesims.com.The study was produced independently as a public service, without industry or government funding.